We also buy and sell things on a daily basis. There is no doubt that most of us assume that we will only become owners of these purchased goods if we run the risk of damaging or destroying our purchase. In our law, the transfer of ownership and the transfer of risk differ in their concepts. Although they are usually the same in our daily lives, legally they are not. If this is the case, the buyer bears the risk of loss or damage. In this situation, the buyer does not receive the goods, because they are accidentally lost or damaged, he only takes care of the damaged goods. As we have seen, the seller is generally exempt from the obligation to deliver other goods in accordance with the contract. ”Risk of loss” means who must pay – who bears the risk – if the goods are lost or destroyed through no fault of one of the parties. It is obvious that this topic is important: purchase contracts for the purchase of a new car for $ 35,000. While the car is on its way to the buyer, it is destroyed in a landslide. Who takes the $35,000 hit? Article 66 CISG provides: ”Loss of or damage to the goods after the transfer of risk to the buyer shall not relieve the buyer of its obligation to pay the price, unless the loss or damage is due to an act or omission of the seller.” A buyer becomes the owner of movable property only when it is ”delivered” to him.

However, the risk is transferred to the buyer upon conclusion of the purchase contract. In other words, if the purchased goods are stolen or destroyed before the property is repossessed, there is a loss of both the goods and the price. Now suppose a seller violates the contract by offering non-conforming goods and the buyer who has not discovered the non-conformity accepts it – the non-conforming goods are in the hands of the buyer. The buyer has the right to revoke the acceptance, but before the defective goods are returned to the seller, they will be destroyed in the buyer`s possession. The seller violated, but here`s the wrinkle: The UCC says the seller only bears the loss to the extent that there is a deficit in the buyer`s insurance coverage. Uniform Commercial Code, § 2-510 (2). Very Fast Foods had received the sponges and only discovered a few days later that the sponges were not in compliance with the contract. Very Fast has a right of withdrawal and announces its intention to do so. A day later, his camp burns down and the sponges are destroyed.

He then discovers that his insurance was not enough to cover all the sponges. Who can resist the loss? The seller in turn does this to the extent of a defect in the buyer`s insurance coverage. Sometimes the question arises as to whether the buyer`s other creditors can claim the goods if the purchase contract grants the buyer certain rights to return the goods. The answer seems simple: in a contract of sale on approval, where ownership remains with the seller until acceptance, the buyer does not own the goods – therefore they cannot be seized by his creditors – unless he accepts them while they are the buyer`s goods (subject to his right to return them) in a purchase or return contract and can be taken over by creditors, if they are in his possession. The theory of risk transfer is one of the most problematic issues in contract sales law. Indeed, if the goods sold are lost or accidentally damaged, the buyer will not receive what he has purchased because the seller is exempt from his obligation to deliver (Art. 88.1 CESL). However, one unresolved question remains: does the buyer`s obligation to pay the price persist? If the answer is in the affirmative, it is alleged that the buyer bears the risk. Therefore, it is very important to clearly determine at what stage of the contract period the risk is transferred to the buyer.

It is not necessary for the buyer to go to the property for him to have an insurable interest. The buyer acquires ”special ownership and insurable interest in the goods by identifying the existing goods as goods to which the contract relates”. Uniform Commercial Code, § 2-501 (1). We have already discussed how it can arrive at an ”identification” of goods. Parties can do this by marking, marking, marking or separating them – and they can do so at any time. We also establish rules on when the goods are considered identified for the contract under the UCC if the parties do not do so themselves (Section 9.1.2 ”Goods identified in the contract”). We noted at the beginning of this chapter that the question of who has title is important for several reasons, one of which is that it affects who has an insurable interest. (You can`t get insurance for something you`re not interested in: if you don`t have a title, you may not have an insurable interest.) And it has been found that the rules of risk of loss are influenced by insurance. (The theory is that a businessman is likely to have insurance, which is a business cost factor, and if he has insurance and is also in possession of property – even non-compliant – it is reasonable to charge his insurance company for the loss of the property; so they will have reasons to take care of it in their possession, otherwise their insurance rates will increase.) In business transactions, insurance is important, and when goods are lost or destroyed, is the frequent conflict between the buyer`s and seller`s insurance companies, neither of which wants to be responsible. They want to deny that their insured had an insurable interest. It therefore becomes important to know who has an insurable interest. The CISG provides essentially the same thing (§ 69): ”If the contract is something other than shipping, the risk passes to the buyer if he takes over the goods or, if he does not do so in time, from the moment the goods are made available to him and he commits a breach of contract by non-acceptance.” Theft.

The party that currently or currently holds ”ownership” of the goods bears the risk of loss for that particular good. Insurable interest becomes important when the goods suffer accidental damage because, among other things, often neither the seller`s insurance company nor the buyer`s insurance company wants their insured to have an interest in the goods: each party disputes this. . . .